The Problem With PASPA

The failed law gets increased attention as states prepare for the legalization of sports betting

Earlier this month, the AGA released our annual prediction of how much Americans would wager on Super Bowl 52, estimating $4.76 billion in total bets. Due to the failed Professional and Amateur Sports Protection Act (PASPA), a staggering 97 percent of total wagers, equaling more than $4.6 billion, were estimated to be bet illegally across the United States.

And the numbers are in. A record total of $158.58 million was wagered legally in Nevada sports books (exceeding our own estimates by around $20 million).

AGA has continued to engage stakeholders in the important debate, raise the profile of PASPA’s failings, and call for sensible change to this bad federal prohibition. While the announcement of our Super Bowl yielded a significant amount of national news coverage (ESPN, Fox, CNBC, Forbes, USA Today, AP, etc.), what strikes me is how drastically the tenor of the content has changed since we first began this effort two years ago.

No longer are journalists, talking heads, legislators, regulators, leagues, owners, etc. talking about what would happen if we enabled legal sports wagering—they are either talking about when it happens, or have moved past timing entirely to discuss how this will play out.

There are currently 34 active pieces of sports betting legislation in 16 states, and judging by how quickly states and tribes are getting prepared to offer sports betting should PASPA be overturned, those numbers will most certainly increase throughout current legislative sessions.

For over 25 years, PASPA has empowered an illegal sports betting market full of shady offshore operators and corner bookies managing at least $150 billion annually. So the Super Bowl attracting record amounts wagered isn’t particularly surprising to anyone monitoring this issue.

What isn’t told is how thin the margins are for our members who are doing this on the up and up. Even in a record year for Super Bowl bets, total gaming operator profit barely exceeded $1 million. Any negotiation about what a legal framework looks like has to take this into consideration, lest we fail at what should be our mutual, fundamental goal: driving the illegal market out of business.

All eyes are on the U.S. Supreme Court, which will issue a ruling on Christie v. NCAA this spring, and we’re as optimistic as ever that it’s time for a change.